Section 3. Notice Requirement

3.1 At least 30 days, but not more than 90 days, before the beginning of the Plan Year, the Employer will provide each Covered Employee a comprehensive notice of the Covered Employee’s rights and obligations under the automatic contribution arrangement, written in a manner calculated to be understood by the average Covered Employee. If an employee becomes a Covered Employee after the 90th day before the beginning of the Plan Year and does not receive the notice for that reason, the notice will be provided no more than 90 days before the employee becomes a Covered Employee but not later than the date the employee becomes a Covered Employee.

3.2 The notice will accurately describe:

(a) The amount of Default Elective Deferrals that will be made on the Covered Employee’s behalf in the absence of an affirmative election;

(b) The Covered Employee’s right to elect to have no Elective Deferrals made on his or her behalf or to have a different amount of Elective Deferrals made; and

(c) How Default Elective Deferrals will be invested in the absence of the Covered Employee’s investment instructions.

Sample Adoption Agreement Language:

Article [ ] Automatic Contribution Arrangement

[ ] If checked, the Automatic Contribution Arrangement provisions of Article [ ] apply.

September 28, 2009 414 2009–39 I.R.B.